A New Standard for Non-Financial Reporting
A recent report from Accountancy Europe sets out an articulate and ambitious plan to cut through the noise of non-financial reporting initiatives with a global, interconnected reporting standard.
Financial information alone cannot give a full picture of a company’s performance, with relevant information on environmental risks and opportunities, social impacts and valuable internal intangibles currently addressed by an overwhelming proliferation of non-financial reporting frameworks.
This leads to inconsistency, a lack of comparability and, ultimately, reduced transparency. Beyond business, it stands in the way of effective policy making and regulation.
Accountancy Europe’s report calls for a harmonised global standard, connected to financial reporting, to coordinate, rationalise and consolidate the many non-financial frameworks and create a core set of global non-financial metrics.
Financial information has been standardised at an almost global level thorough the IFRS, however, non-financial reporting does not have a similarly harmonised approach. Additionally, while financial and non-financial information influence each other constantly, they are currently unconnected in reporting terms, reducing transparency and inhibiting accurate analysis.
The solution? A core set of standardised, material, global non-financial metrics to be used in mainstream reports, connected to and reported with the same rigour as financial information. Accountancy Europe proposes that a new standard setter be set up under the auspices of (a renamed) IFRS Board of Trustees.
An ambitious plan for dramatic change, perhaps, but with this report Accountancy Europe has set out a detailed, logical and comprehensive account of what could be a workable solution to a pressing problem – well worth a read and — no doubt — some debate.
Access the report here.